BREAKING: Flat-rate tax reductions on yacht charter in Italy still apply this summer

By Katia Damborsky 21 July 2020

The new Italian Value Added Tax (VAT) laws will not take effect until November 2020, meaning that the old flat-rate (or lump sum) reductions will still apply for yacht charter in Italy this summer 2020.

After much speculation, the Italian Tax Authorities have announced today (21 July 2020) that the new laws for applying for VAT reductions will not come into place until November 2020.

From now until that time, charters will be subject to the old scheme regardless of the signature date on the contract.

The scheme which will be in operation this summer is known as a 'lump sum' or 'flat-rate' reduction. It stands at 6.6% for yachts over 24 meters.

superyachts at the harbour in sardinia, porto cervo

The delayed scheme, which will take effect in November, is based on time spent in non-EU waters. From then onwards, VAT reductions will be proven by travel cartography and AIS tracking data.

This new scheme was first introduced December 2019, when the European authorities announced major reforms for VAT reductions on Mediterranean yacht charters beginning in 2020.

The reform aims to scrap the practice of charter yachts briefly cruising into international waters in order to benefit from a VAT reduction.

While no official reason has been given for the postponement, it is possible that Italy is looking to recover its tourism season after bearing the brunt of COVID-19 during the start of summer. It's equally possible that provisons for calculating time spent in non-EU waters have not yet been made clear, so it is not yet feasible to begin implementing the new laws.

This is the second time the new reform has been postponed.

amalfi coast seascape, town of positano and pretty houses on the hills

If you are interesting in a crewed yachting vacation in Italy this summer, there are plenty of beautiful spots to cruise. One of the most favoured is Italy's alluring west coast; you can browse all charter yachts on the Amalfi Coast now.

To find out more about VAT and yacht charter, or if you'd like to book a yacht, please get in touch with your preferred yacht charter broker.